Turning Failure Into Hope

The Sunday Business Post’s investigation into JobBridge was devastating. The programme has been used to staff the HSE, Hewlett-Packard, public enterprises, supermarkets and universities. A large number of interns report frustrations, especially as they have almost no workplace rights, while the investigation showed a scheme that grew out of control lacking robust monitoring and compliance mechanisms.

And let’s use the money to create a real programme of work, targeted at people who are having a hard time in the market. Long-term unemployment can be a dismal experience. The longer you are out of work, the more difficult it can be to get back in: your current skills may be become degraded, previous work routines are undermine, there can be mental health issues, you get stuck so far into a rut that it is difficult to pull yourself out. Training programmes work best when the person is motivated and there is a belief that a job is possible at the other end. Long-term unemployment is the ultimate de-motivating experience, leaving people with little hope.

In 2015, long-term unemployment (without a job for more than a year) averaged 114,000. That amounts to 5.3 percent of the labour force. By contrast, long-term unemployment in the EU-15 makes up 4.7 percent.

When we turn to what can be called ‘chronic’ long-term unemployment – two years and longer – we find, on average, 83,000 stuck in this situation and, of this, 50,000 have been unemployed for four years or longer.

So let’s redirect the resources – approximately €85 million – from the JobBridge and Gateway programme) into a guaranteed real job programme. In other words, the state should become an employer of last resort; when people cannot find work in the labour market, the state will provide that work. What would such a programme look like?

An Employer of Last Resort

The Gateway programme is a local authority labour activation scheme that provides short-term and part-time work and training opportunities for people unemployed longer than two years.

Participants work for the local authority for 19 ½ hours a week and the placement lasts 22 months.

Participants can take up other part-time employment provided it does not interfere with their Gateway work placement.

There are two major problems with Gateway. First is the coercive element: those who refuse a placement without good cause may have their social protection payment reduced or even removed altogether.

Secondly, job displacement: there is a real danger that long-term unemployed are doing work that should be done by full-time local authority workers.

Let’s transform this programme (its advantage is that it doesn’t interfere in the business market):

Turn the placement into full-time employment on the National Minimum Wage with contracts for two years (there could be some provision for part-time work where appropriate).

Extend the programme to all non-profit and civil society groups in addition to local authorities.

Remove the coercive element and make the programme voluntary.

Target, in the first instance, people out of work for two years or longer with particular (though not exclusive) emphasis on young people, those over 50 years and high unemployment areas.

Integrate work with training/education. This is important as many of those on long-term unemployment may have skills deficit which would limit their transition from the scheme into other work.

To the extent that local authorities expand their job opportunities, this should only be undertaken where there is a prospect of transition to a full-time local authority job, overseen by employers and trade unions.

What Kind of Work?

There will be criticism that such programmes are largely ‘make-work’. However, when looking at the employment currently offered by local authorities through Gateway, we can see that there is real work going on.

This is some of the work that is already being undertaken –providing a broad range of opportunities up and down the skill ladder.

Community Participation

Under the current Gateway programme only local authorities can provide placements. This should be extended to non-profit groups, civil society organisations and community groups – allowing them to devise programmes that would employ people. The range of such groups could be considerable:

The criteria for participation should be that civil society groups are non-profit, do not compete with commercial enterprises and create programmes with projected outcomes that are measureable.

One can imagine these groups coming together – under the organisation of the local authority – in small town, city suburb, rural area, villages to create programmes that would add to the community wealth and the local economy. This is about community regeneration and repair, participation and democracy.

Funding the Programme

I estimate that the combined JobBridge / Gateway budgets could employ nearly 7,000 on a full-time basis (with a €3,700 payment for resources, materials and training). This is based on the wage minus the Jobseekers’ Allowance paid.

However, this doesn’t count the tax and PRSI gain the government would gain –which, on average, would be approximately €2,400 including employers’ PRSI. Nor does it count extra consumption tax revenue from greater purchasing power recipients would receive.

We could take a more radical approach and examine the prospect of amalgamating a number of schemes besides JobBridge and Gateway: Tus, Community Employment Programme and the Rural Social Scheme. There is a total of €627 million spent on all these schemes combined. Are we getting the best impact out of this – in terms of employment and social value? We should be aware that some of these schemes cater for more than just long-term unemployed. The Rural Social Scheme, for instance is targeted at under-employed and low-income people working in agriculture and fishing. Nonetheless, an amalgamated programme catering for full-time and part-time work, aimed at different social constituencies could be considered.

This employer of last resort programme will not create a full employment economy. That can only come about when all the levers available to the Government –labour market, fiscal, investment, enterprise policy– are pulling in the right direction. This is only a modest start – but one that can be expanded if it is seen to work.

This is a programme to get people back into work, back into the social networks that will help them to explore new life-chance and job opportunities for themselves. It is about giving hope.

And the great thing is that this is wholly feasible and can be paid out of current resources. One thing’s for sure – it would be a great investment.

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